Should I Start Investing in Real Estate Now?

I spoke on creating plan B asset based income, how people's 401(k)s are not going to carry the load for them when they retire, and certainly about the big topic today – inflation. In fact, I recently published a book this spring titled Inflation – The Silent Retirement Killer.

I had quite a few people in my sessions wanting to learn more, as you would expect. We've seen a surge of professionals/business owners who have been reaching out to us the last several months because of the volatility of the marketplace.

We haven't seen this much volatility in the last 14 years. Since the great financial recession of 2008, '09 and '10, we've had this bull run market and everybody feels like it's all good… until it isn't.

I’ve been talking about this for years – there will always be a turn of the cycles. 

This one has just been extended for a few more years due to the government, the federal reserve, kicking the can down the road. But now the chickens have come home to roost. This is just what happens. The market will cycle.

So I have people coming to me now, especially dentists with their 401(k)s in shambles, and they have lost over 20% in the last six months. One guy had lost over a million dollars. I mean, that's pretty substantial even for people with high income and relatively good net worth. That's a lot to lose.

Of course he's concerned and he's now asking, “Gosh David, 

I want to get started in real estate investing now – how do I get started?” 

And I said, “It’s the most dangerous time right now for anybody to get started in anything new whether it's building out and expanding a business or getting involved in real estate as an active or passive investor.” These are really dangerous times and unless you know what you're doing, this is where people get hurt. And it happens whenever the market cycles and corrections happen.

It's like a forest has been growing for years and years and all the underbrush has also grown along with it, almost taking the large trees out. So every once in a while, you need a forest fire that comes in and takes out all that underbrush. That's what a recession does: it takes out all the excess. And we've had plenty of excess.

Back to my point.

I'm a huge believer in real estate as a tangible asset in an inefficient marketplace that has allowed me to navigate – not sit in place, not do one model, not just put my money in one place – but to navigate these ups and downs of the market cycles. I've done it for over 40 years. I understand how to do it, and I've got the access points to do it. And this is what we do in Freedom Founders – navigate the market cycles and keep our money safe.

As Warren Buffet says, “Rule No. 1: Never lose money. Rule No. 2: Never forget rule No. 1.” Many people are not only going to forget rule number one and rule number two – they don't even know how to abide by them. That's the scary part. 

So I told a lot of docs, particularly the young ones, “Right now, what you need to do most is just focus on your practice, your business.”

You're going to need liquidity. You're going to need margin. 

Don't be putting your money in investments that you can't get your money back out of right now, because you're going to need that margin. We're heading into a recession right now, probably a deep one. With your patients, your clients, your higher overhead and insurance companies pushing down on reimbursements rates – this is a time when you need extra margin. 

Don't be looking for some higher flier real estate place to put your money because odds are, the people you may connect with haven't been through a full market cycle themselves. They don't know what they're getting into. They're just taking your money based on what they've done in the past few years, which has been pretty easy for anybody to make money. But now…

We're in a market when those people, even in real estate investing are going to get flushed out. 

So you need to figure out where you are, who you need to follow, and who's taking the path that can get you where you want to go. That's the key right now. Don't do it alone. That is probably the worst thing you can do right now.

Get help whether it's in your business or in your investments, but remember you've got to be focused on being your best financial advocate. You've got to be on the forefront of this. Don't abdicate that to this marketplace. Don't put money in 401(k)s without realizing what you're doing, because you're locking that money up for a long time and you have no access to it until you're 59 and a half. In my opinion, that's not a good thing to do.

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And if you're ready to take a step forward with Freedom Founders to preserve your freedom going forward, I invite you to schedule a call with my team to see if we can help you take a step towards your freedom.